The UK government will launch a fast-track licensing regime for financial services start-ups, enabling them to operate while pursuing full authorisation. The finance ministry announced the initiative on Thursday as part of a broader effort to reduce bureaucracy and stimulate economic expansion. This new system will allow firms meeting specific entry criteria to operate provisionally and conduct regulated activities for up to 18 months, with appropriate safeguards, while they finalise the full licensing process.
Financial Services Minister Lucy Rigby stated that many promising firms have experienced growth challenges due to the extended time required to obtain full authorisation. “This new regime will help high-potential start-ups and scale-ups trade and grow sooner,” Rigby added. The initiative comes as the Financial Conduct Authority (FCA), which regulates financial firms, has faced criticism from fintech companies alleging that its approval process is excessively lengthy and expensive, thus hindering investment and expansion.
The government has also requested the FCA to alleviate the regulatory burden. Sheree Howard, executive director at the FCA, commented that the proposed regime is designed to remove barriers to entry for start-ups. The FCA will provide further specifics regarding eligibility criteria for the fast-track licensing regime.
“We will work closely with industry, consumer groups and government to ensure the regime reduces barriers for relevant firms, while maintaining the UK’s high regulatory standards,” Howard stated. The goal is to support innovation in the financial sector while upholding regulatory standards.
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